Why Units of Enable Midstream Partners Plunged Nearly 59% in March
Units of master limited partnership Enable Midstream Partners (NYSE: ENBL) nosedived 58.6% in March, according to data provided by S&P Global Market Intelligence. Weighing on the midstream company were concerns about the sustainability of its high-yielding distribution amid a massive plunge in crude oil prices last month.
Crude oil prices plummeted last month because of the COVID-19 outbreak and the breakdown of Russia's market support agreement with OPEC. That's causing oil to pile up in storage, which has investors worried that U.S. producers will need to reduce their production. That would impact the volumes handled by midstream companies, which then generate less revenue. On top of that, investors are growing deeply concerned that a wave of bankruptcies will engulf the sector, possibly forcing pipeline operators to reduce their rates.
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Source Fool.com
